Disclosure and Handling of Multiple Offers
Current market conditions have led to an increase in listed properties receiving multiple offers. Members have expressed concern over misconceptions of the disclosure and handling of these multiple offer scenarios.
Standard of Practice 1-15, of the NAR Code of Ethics, says “Realtors, in response to inquiries from buyers or cooperating brokers, shall, with the sellers’ approval, disclose the existence of offers on the property.” Unless the listing agent has obtained the seller’s permission ahead of time, he or she may not have the authority to disclose that information. It is also important to recognize that the listing agent has no duty to contact any or all other buyers who made an offer if additional offers are received.
Some listings in the MLS indicate that the seller wishes to receive offers and review them all at a specific time and date in the future. Even with such instructions from the seller, the listing agent still has a duty under both Agency law and the NAR Code of Ethics to inform the seller of the existence of all offers, on a timely basis. The seller does have the right to accept an offer before the previously agreed upon deadline. While waiting to see if other offers are received might seem to be in the best interest of the seller, there may be other motivating factors in play, and ultimately, it is up to the seller whether they wish to wait, counter for highest and best or accept an offer.
Paragraph 19C of the CVR MLS listing agreement states “… The Broker and its licensees have a duty to submit to Owner all offers to purchase the Property. Broker and its licensees shall not disclose to prospective purchasers (or their real estate licensees) the terms of any other offers to purchase the Property received by Broker without Owner’s prior written consent.” Listing agents may find it helpful to discuss the handling of multiple offers and obtain the sellers written permission to disclose the existence and/or terms of other offers, at the time they are taking the listing so it can be memorialized in the listing agreement itself.
Ask your Broker about disclosure and the handling of multiple offers. If you have questions concerning this article, contact Peggy Lynch at plynch@RARealtors.com or 804-422-5006.